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Goldman Says Most Cryptocurrencies to Hit Zero

Feb 08, 2018

Goldman Says Most Cryptocurrencies to Hit Zero

Cryptocurrencies are a polarizing topic for investors today. While trading cryptocurrencies offers an opportunity for investors to make money and diversify their existing portfolios, it is the underlying blockchain technology that represents the greatest potential for wealth creation. Although blockchain technology has the ability to revolutionize financial transactions and processing, the coins traded on their behalf may not be as sustainable. This is a point to keep in mind when reading a recently published Bloomberg Technology article titled “Get Ready for Most Cryptocurrencies to Hit Zero, Goldman Says”. The general hypothesis delivered in the piece is that many of the cryptocurrencies currently in existence are unlikely to exist in the long-term. A combination of sluggish transactions rates, numerous security concerns, as well as, the excessive cost of currency creation are cited as the greatest challenges facing the cryptocurrency market today.

The internet search engine explosion of the late 1990s-early 2000s is a case study that can help investors understand where the market for cryptocurrencies may be heading over the next few years. It was the well-developed laggards like Google, for instance, that were able to thrive without much competition from older, more established peers. The cryptocurrencies that exist today may be bound for obsolescence. The next generation, however, may represent opportunities for growth and even more disruption of traditional supply chains.